Screening out sin stocks remains the most common form of responsible investment but there is growth in managers using positive screening, sustainability-themed investing and impact and community investment.
But it found that while negative screening is still growing it has yet to catch up to what consumers want to avoid investing in.
Controversial weapons and tobacco were the most common investments screened out of funds but people searching the RIAA's responsible investment tool were mainly looking for funds which screened out fossil fuels and human rights violations.
O'Connor said weapons and tobacco may not be a priority for consumers because they assumed that the most harmful investments have already been excluded from investment funds.
"There are expectations these things are already being managed."
Most KiwiSaver funds moved to exclude tobacco and controversial weapons after a public outcry following media coverage in 2016 about the amount of money invested in those sectors and the potential for legal breaches.
The 2018 year report doesn't include data on changes made by managers in the wake of the Christchurch terror attack which saw New Zealand change its gun laws and pressure placed on social media companies over their poor handling of videos of the attack.
The NZ Super Fund moved quickly to exclude companies involved in the manufacture of civilian automatic weapons and semi-automatic firearms, magazines or parts prohibited under New Zealand law selling out of $19 million worth of investments.
O'Connor said the reaction to the terror attack was an example of the relevance of responsible investment.
"The responsible investment community responded decisively to rule out investments in weapons, and took on large social media companies, imploring them to be more accountable for the content they publish and distribute on their platforms."
But how many managers will have pulled out of gun investments remains a grey area as the law does not specifically prohibit investment in the sector.
O'Connor the finance sector was still going through the process of reflecting the values that their clients wanted.
"That needs to continue to improve."
He said the sector was starting to take a more active role in tackling real-world issues through the investment decisions they made and the influence they had over companies through pressuring boards and voting in certain ways.
"There is a much greater propensity from the investing community to use all those tools available to them."
O'Connor said what stood out for him last year was the move to see responsible investment as a way to drive better returns for investors.
"The latest figures reflect a wider understanding that responsible investing is the foundation of good investment practice. The majority of investors believe that the number one driver of market growth is the strong financial performance of investments that consider environmental, social and governance factors."
